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Industry Agglomeration and Investment in Rural Businesses
Author(s) -
Gabe Todd M.
Publication year - 2005
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2004.00209.x
Subject(s) - economies of agglomeration , business , economic geography , investment (military) , industrial organization , economics , international trade , economic growth , politics , political science , law
This paper examines the effects of local industry agglomeration on investments in equipment and machinery by businesses located in Maine. Descriptive analysis of the data indicates that a substantial amount of the investments in nonmetropolitan counties and small towns occurred in high‐agglomeration county‐industries. However, econometric results imply that, while positive, the effects of agglomeration on investment are somewhat modest. Further analysis of industry‐specific descriptive statistics provides mixed evidence on the connection between business investment and local industry agglomeration. These results suggest that local policymakers should proceed with caution when implementing cluster‐based economic development strategies.